SPANISH FORT, Alabama -- The three-man board of directors of the special tax district for the ailing Spanish Fort Town Center voted Monday to increase license fees on lodging and retail sales, but not to the levels requested by the bondholder.

Beginning Nov. 1, sales tax rates at the shopping center anchored by Bass Pro Shops will climb from 1.5 to 2.45 percent, resulting in an overall levy of 10.95 percent on all purchases. A lodging tax on hotel and motel room rentals will increase from 4 percent to 8 percent.

In addition, the board established a monthly fee for an apartment complex on the site. The fee, according to cooperative district board attorney Preston Bolt, will be assessed at $35 for one-bedroom units and $50 for apartments with two or more bedrooms.

The district issued bonds in the amount of $30.5 million in 2007 to finance the infrastructure for the center. But the center hasn’t been able to generate enough revenue to keep up with bond payments.

Bolt said the higher fees are an effort by the district to more closely meet its bond obligations.

The rate hikes will increase the district’s revenue by about $750,000, according to a report by Semoon Chang, a University of South Alabama economist commissioned by the district to study the effects of the rate hikes.

A representative for the bondholder, U.S. Bank National Association, however, said that it appears the cooperative district could be headed for a default on the bonds in March.

The bondholder requested that the special levy be raised from 1.5 percent to 4.1 percent, increasing the tax on sales from 10 to 12.6 percent. The bank also asked that the levy on the shopping center’s two hotels increase from 4 percent to 12 percent. Fees at the requested levels would allow the debt service to be met, according to Anne Stone Sumblin, the attorney representing U.S. Bank National Association.

"We’re disappointed that the rates are not going to be increased to the extent that our report shows is necessary in order for this district to meet its obligations," Sumblin said.

At the newly adopted rates, the district will still likely default on its payment, and a federal lawsuit filed in Mobile this summer seeking the requested rate increases will continue unless another plan emerges to settle the issue, she said.

Shawn Alves, an attorney with Stone, Granade and Crosby, expressed satisfaction with Monday’s action by the district. The law firm is the local representative of Andrew Bolnick.

After the center failed to generate enough revenue to keep up with bond payments, a Baldwin County judge in April appointed Florida-based Bolnick to act as receiver and take control of the Town Center after Bank of America filed suit over defaults by developer Cypress Equities.

"I’m just pleased that the board’s goal is aimed at protecting the long-term viability of the development for the benefit of all parties, including non-parties like the city of Spanish Fort and the public as a whole," Alves said. "I think it’s in everybody’s interest to make this work."

Monday’s action came after the board received Chang’s report last week. In the report, Chang said that raising the sales tax by more than 1 percentage point may lower profits for the already struggling retailers at the center and may make the facility less attractive to new businesses.

A tax rate of 10.95 percent is intended to keep the Town Center from being branded as one of the top 10 shopping areas with the highest sales tax rates in the nation, according to the report.

The revised fees rates, excluding the apartment fees, would end Nov. 1, 2016. Unless the district takes further action, the fees will revert to the current levels established in 2007, according to the resolution adopted Monday.

If revenues brought in by the current rates become sufficient to meet the debt obligations, then the new rates, excluding the apartment fees, will lapse.